USDZAR closes within prior day's range after lackluster session
US Dollar/South African Rand (USDZAR) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
USDZAR finished the month -1.08% lower at 17.3533 after gaining 820 pips (0.47%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (USDZAR as at Jun 30, 2020):
Tuesday's trading range has been 1649 pips (0.96%), that's far below the last trading month's daily average range of 2973 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for USDZAR. Prices continued to consolidate within a tight trading range between 17.1248 and 17.5334 where it has been caught now for the whole last trading week.
Four candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and two bearish patterns, the Bearish Hikkake Pattern and the Last Engulfing Top Pattern. The last time a Bearish Hikkake Pattern showed up on April 20th, USDZAR actually gained 0.68% on the following trading day.
The FX pair managed to close back above the 100-day moving average at 17.3084. Prices are trading close to the key technical resistance level at 17.5107 (R1).
The forex pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might accelerate should prices move above the nearby swing high at 17.5334 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 17.1248 where further sell stops could get activated. As prices are trading close to June's high at 17.6198, upside momentum might accelerate should the currency mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/ZAR. Out of 62 times, USDZAR closed lower 51.61% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after five trading days, showing a win rate of 61.29% with an average market move of -0.14%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.82% and NZDUSD closing 0.53% higher. On the flipside the worst performers have been USDCAD closing -0.62% lower and USDCHF losing -0.41%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPZAR surging 1.31% and GBPJPY closing 1.16% higher. The worst performers of the day have been USDNOK tanking -1.51% and EURGBP closing -0.9% lower. Read more